Russia’s MegaFon Said to Plan Hiring Banks for IPO

April 19 (Bloomberg) -- OAO MegaFon, Russia’s second-largest mobile-phone operator, may raise as much as $4 billion
in an initial public offering and plans to interview banks as
early as this weekend, according to two people with knowledge of
the plan.

MegaFon, based in Moscow and partly owned by Sweden’s
biggest phone company, TeliaSonera AB, has yet to decide where
the listing will take place or set the amount it seeks to raise,
said the people, who declined to be identified because the plans
are private. While there’s no definite timetable, the IPO could
happen as early as this year, said one of the people.

The three major shareholders in MegaFon -- TeliaSonera,
Russian billionaire Alisher Usmanov’s AF Telecom and the telecom
investor Altimo -- have been discussing the ownership structure
and future governance of the company for about three months,
Cecilia Edstroem, a spokeswoman for Stockholm-based TeliaSonera,
said April 11.

At $4 billion, MegaFon’s IPO would be the biggest worldwide
since July, when Spain’s Bankia SA raised $4.4 billion,
according to data compiled by Bloomberg. O1 Properties Plc, a
Russian real estate investment firm, is seeking about $400
million selling primary shares in a London IPO, according to
terms for the sale obtained by Bloomberg.

Usmanov owns 31 percent of MegaFon and TeliaSonera holds 44
percent, according to the company’s website. TeliaSonera may
sell part of its stake in MegaFon, UBS AG said in a report this
month.

TeliaSonera and Altimo, the telecommunications arm of Alfa
Group, agreed in 2009 to combine their stakes in MegaFon and
Turkcell Iletisim Hizmetleri AS in a new company to clarify
ownership and increase dividends. The agreement hasn’t been
carried out because of legal disputes.

The Russian business publication RBC Daily, citing
unidentified people, reported April 2 that Usmanov’s AF Telecom
was looking to buy out Altimo’s 25.1 percent stake in MegaFon
for $5 billion. That would make AF Telecom a majority owner.

MegaFon CEO Sergei Soldatenkov may step down next week
ahead of schedule to become Russia’s communications minister,
Moscow-based newspaper Vedomosti reported, without citing
anyone. The company announced in January that Soldatenkov didn’t
plan to renew his contract, expiring in June, after nine years
in the job.